Exxon Mobil will fuel boom with new complex

New campus likely to spur Woodlands boom but cause downtown, Greenspoint to worry

Published 5:30 am, Tuesday, June 7, 2011

Exxon Mobil Corp. is consolidating thousands of Houston-area employees into an elaborate new campus being developed just south of The Woodlands — a move that could trigger a real estate boom in the surrounding area, but leave office buildings elsewhere scrambling for tenants.

About 8,000 employees will relocate to the new facility to be built on a 385-acre site near the intersection of Interstate 45 and the Hardy Toll Road.

The Irving-based oil giant has been preparing the heavily wooded site for months, but had not confirmed the project until early Tuesday when it notified employees in an email and later made a public announcement.

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The decision to consolidate was the result of a long-term study of the company's U.S. office space.

"There seems to be value in consolidating the employees in the Houston area," said spokesman Alan Jeffers, adding that the new space will provide a better working environment and the opportunity for more employee collaboration.

The campus is expected to boost demand for housing, commercial development and office space nearby, strengthening the region spanning northern Harris County and southern Montgomery County.

"The impacts in this area are going to be substantial," said Houston economist Barton Smith.

The move, which affects most of the company's Houston-based office workers, will begin in 2014 and is expected to be completed in 2015.

Childcare center

A team of architecture firms designed the project, which will include multiple low-rise office buildings, a laboratory, conference and training centers and child care and wellness centers.

While generating economic growth in one area, the consolidation could have negative ramifications as well.

Exxon Mobil will vacate multiple Houston buildings, including a downtown skyscraper and properties in the Greenspoint area.

The company occupies 16 percent of the office space located in the Greenspoint District. That amounts to 2.2 million square feet of space - much of which is concentrated in the Hines Greenspoint Plaza Complex.

Jack Drake, president of the Greenspoint District, said he's not worried about filling the space Exxon Mobil will leave behind, and that he's been getting inquiries from companies wanting to move into the company's space.

"Change begets opportunity and Greenspoint will likely become a more diversified market with a new group of tenants, and that's healthy," he said.

Downtown, too, will feel the effects of Exxon Mobil's move.

The area already is losing Continental Airlines headquarters workers because of the carrier's merger with Chicago-based United Airlines. Now Exxon Mobil employees will vacate its building at 800 Bell. The 44-story tower was built in 1963 for Humble Oil, Exxon Mobil's predecessor.

But Eury noted that the downtown office market recovered after Enron Corp. collapsed and the merchant energy business dried up a decade ago.

He also pointed to other businesses moving into the downtown market.

"If you put all these pieces together, is it a crisis for downtown? I certainly don't believe that," Eury said.

Jeffers said the moves announced Thursday involve only local employees, but he didn't rule out transfers from other cities later. The study of the company's office space continues, he said, and the new campus has room for expansion.

Jeffers said Exxon Mobil's Irving headquarters will not move, nor will the Fort Worth offices of recently acquired XTO Energy. The company's Fairfax, Va., offices, however, are part of the study. Some 2,500 employees work in that location.

"We're continuing to study whether it makes sense for other U.S. locations to be located on this campus," Jeffers said.

Those slated to move include most of the people who work in the company's local upstream and chemical offices, along with various support staff. Some employees who work in north Houston and at the company's Brookhollow offices will not relocate.

In reaction to the news Tuesday, the Greater Houston Partnership encouraged Exxon Mobil to relocate more personnel and divisions to the new facility from other cities.

"Houston is a technology and innovation hub for the energy sector and has much to offer them," the Partnership's chief economic development officer, Craig Richard, said in a statement.

Spillover effect possible

If Exxon Mobil does move workers from outside Houston to the new campus, employment there could approach the peak size of the complex established by former Houston company Compaq Computer Corp.

Real estate observers predict a large spillover effect from the new campus.

"We might see the emergence of a new energy corridor up north," said Trey Halberdier, managing principal of Bandier Realty Partners LLC, a commercial real estate firm that is active in the area.

Ronnie Matthews, a real estate agent with RE/MAX Legends, expects home values in Spring and The Woodlands to climb - despite building already under way in the area - as the Exxon Mobil complex creates demand for housing.

Architecture firms Pickard Chilton, PDR and Gensler are involved in the campus design, which will be built to attain certification from the U.S. Green Building Council through its Leadership in Energy and Environmental Design program. Hargreaves Associates is the landscape architect.

Jeffers would not disclose the cost of the project or its planned square footage.